Preferred Stock Investing-The Good , The Bad and The In Between 2021

[Mulligan]

This continues to trade below par. I picked up some more at $49.05 today. It's trading at $49.68 currently and higher than average volume. Someone is selling off.

I bought more at 49.10 and .12 this morning. A safe and relative decent hideout for me.

 

[Born2Fish]

This continues to trade below par. I picked up some more at $49.05 today. It's trading at $49.68 currently and higher than average volume. Someone is selling off.

I bought more at 49.10 and .12 this morning. A safe and relative decent hideout for me.

Nice work with the EP-C bargain shopping!

I was vacationing and missed the dip.

 

[brokrken]

Anyone else own OTRKP? I was on vacation last week and didn't check any accounts or read any news. I see they lost a big customer, but jeez, the pref has been killed way worse than the common. Did they suspend dividends and i'm just not seeing it anywhere?

 

[bobandsherry]

Anyone else own OTRKP? I was on vacation last week and didn't check any accounts or read any news. I see they lost a big customer, but jeez, the pref has been killed way worse than the common. Did they suspend dividends and i'm just not seeing it anywhere?

They lost their largest customer earlier this year and announced the loss of another significant customer recently, those accounted for 75% of their income if I recall. No suspended dividend announced yet, but I'd not rule that out and give that a better than 50/50 prospect.

 

[Running_Man]

Question;
Anyone own Scorpio Tankers SBBA? I am having a difficult time assessing the risk, and why the shares trade below par. It won't be ex div until next month, but shares are now trading 24.90 ish. Any thoughts? I wanted to invest more, but need to understand this one better.

https://www.scorpiotankers.com/investors/reports-presentations/

Here is a link to their most recent presentation. The tanker industry is stuck with reducing market share as governments race to install green energy, resulting in forced retirement of older tankers and refineries. The presentation outlines those issues. On the positive side the company owns the world's largest and youngest product tanker fleet, including being the leading owner in the MR and LR2 product tanker segments. Hence, Scorpio is set to gain an increasing market share going forward, capturing more of the underlying demand as the supply<demand of tankers becoming wider.

Additionally as the President of the United States has requested Arab states to produce more oil it will add more volume need for tankers.

So overall absorbing what I know do I feel like a 7% return justifies the risk. It is a close valuation call, in general if one is confident in following the quarterly presentations in order to get ahead of any cash problems or further downturn in the market, I could see holding this as a speculative holding. I like the preferred issue better than I do the common stock. If you hold for 5 years getting the divdend the entire time you would need to be at least at a preferred price of 22 to be equal to other higher quality preferreds.

 

[Mulligan]

https://www.scorpiotankers.com/investors/reports-presentations/



Here is a link to their most recent presentation. The tanker industry is stuck with reducing market share as governments race to install green energy, resulting in forced retirement of older tankers and refineries. The presentation outlines those issues. On the positive side the company owns the world's largest and youngest product tanker fleet, including being the leading owner in the MR and LR2 product tanker segments. Hence, Scorpio is set to gain an increasing market share going forward, capturing more of the underlying demand as the supply<demand of tankers becoming wider.



Additionally as the President of the United States has requested Arab states to produce more oil it will add more volume need for tankers.



So overall absorbing what I know do I feel like a 7% return justifies the risk. It is a close valuation call, in general if one is confident in following the quarterly presentations in order to get ahead of any cash problems or further downturn in the market, I could see holding this as a speculative holding. I like the preferred issue better than I do the common stock. If you hold for 5 years getting the divdend the entire time you would need to be at least at a preferred price of 22 to be equal to other higher quality preferreds.

Shippers arent usually my thing, but dry bulk index just broke an 11 year record for like the 6th straight day. Cash is just flowing to dry bulk shippers now. Bulker SB has two preferreds SB-C and D, that can be had around 25.10 ish and carry an 8% QDI yield.
Containerships are having cash thrown at them also. I also own GSL-B which is around 25.50 and presently under par plus next divi which goes exD next month and has a 8.75% par coupon. GSL just got a credit upgrade to BB territory which is very good for shippers.
I have been glad I rotated into SB and GSL preferreds this year. They both are past call, but one cant be hurt on a call at these prices.

 

[rayvt]

Additionally as the President of the United States has requested Arab states to produce more oil ....

At which they promptly thumbed their nose and said, "No"

 

[bobandsherry]

They lost their largest customer earlier this year and announced the loss of another significant customer recently, those accounted for 75% of their income if I recall. No suspended dividend announced yet, but I'd not rule that out and give that a better than 50/50 prospect.

I just read that the company set aside 8 dividend payments at time this issue was issued. So with 4 payments already paid there should still be 4 more payment "guaranteed", that's $2.36 back in your pocket as long a company remains viable. So gives you a year to see if this company can recover or find a buyer to acquire.

 

[brokrken]

I just read that the company set aside 8 dividend payments at time this issue was issued. So with 4 payments already paid there should still be 4 more payment "guaranteed", that's $2.36 back in your pocket as long a company remains viable. So gives you a year to see if this company can recover or find a buyer to acquire.

Got $2.22 of it back today! This is one of my smaller holdings, so we'll let it ride and see what comes of it.

 

[yakers]

Looks like my IPFF has been liquidated, rats, now where do I go for international preferreds?

 

[rayvt]

Looks like my IPFF has been liquidated, rats, now where do I go for international preferreds?

Same place that you go for US preferreds.


To a dry well.


With near zero interest rates, there just are not any bargains in preferreds right now. My good preferreds have been getting called/redeemed over the last couple of years, now I'm left with just a handful.

 

[brokrken]

There were some huge RILYZ sales late yesterday afternoon, but I can't find any news. Anyone know why?

 

[bobandsherry]

There were some huge RILYZ sales late yesterday afternoon, but I can't find any news. Anyone know why?

I don't have anything specific, but it was month end so perhaps fund rebalancing?

 

[youbet]

More confusion........ I thought MNR-C was going to be called effective 8-31 due to the consolidation. But apparently not. Next date I see is 9-15, the upcoming call date but no announcement I can see so far.

Anyone know what is going on? I have quite a bit of this fortunately all below PAR.

 

[brokrken]

I don't have anything specific, but it was month end so perhaps fund rebalancing?

Must have been something like that. It got it all back today.

 

[pb4uski]

More confusion........ I thought MNR-C was going to be called effective 8-31 due to the consolidation. But apparently not. Next date I see is 9-15, the upcoming call date but no announcement I can see so far.

Anyone know what is going on? I have quite a bit of this fortunately all below PAR.

I can't recall seeing anything on a call.... the earliest call date is 9/15/21 but no notice of call so far.

While I was looking, I see that another of my positions, ACGLP, will be called on 9/30. Yuk... too many calls and not enough buying opportunities.

 

[Mulligan]

More confusion........ I thought MNR-C was going to be called effective 8-31 due to the consolidation. But apparently not. Next date I see is 9-15, the upcoming call date but no announcement I can see so far.

Anyone know what is going on? I have quite a bit of this fortunately all below PAR.

MNR was expected to be bought out but it got rejected. So it will live on near term to see what other proposals bring.

Starwood Capital is said to be considering what it will do next after Monmouth Real Estate Investment (NYSE:MNR) failed to receive enough votes from holders for a sale to Equity Commonwealth (NYSE:EQC), according to a CTFN report.
Equity Commonwealth terminated its deal yesterday after failing to win the the votes necessary to takeover Monmouth (MNR).

 

[youbet]

Thanks pb4uski and Mulligan!

With the upcoming buy out of MNR on the calendar, I sold the few shares of MNR common stock I had purchased. When I have a significant position in a preferred, I like to hold a tad bit of the common just to keep an eye on things. I held onto the MNR-C waiting for the announced (but tentative I guess) 8-31-2021 conclusion. So, failed to keep my eye on the ball I guess.......

My plan was to wait until Sept when the MNR-C buy out cash hit our accounts and use it to fund our 2021 RMD's. (MNR-C is in our TIRA's.) Now I guess I'll wait until Sept 15th comes and goes and see what happens. And start noodling what else in the TIRA accounts I might use to fund the RMD's if MNR-C is not called.

I knew there was a shareholders' vote coming up but assumed it was just a rubber stamp situation and the buy out would go through. If I'd held onto the common stock, I'd have been one of the voters and on top of it. Ooooops!

 

[youbet]

too many calls and not enough buying opportunities.

Yeah, very much agree. This preferred stuff really seemed easy for a while........ Now I've learned enough to know that I don't know very much and opportunities are tough to come by, at least for me.

 

[Mulligan]

Yeah, very much agree. This preferred stuff really seemed easy for a while........ Now I've learned enough to know that I don't know very much and opportunities are tough to come by, at least for me.

We have hit the ceiling. Unless you buy issues with short duration, one is exposed to perpetual risk at premium prices, while scepter of rising yields looms off in distance. I keep some just because that is how I roll and I understand risk, etc.
But the “safer” plays are issues paying above market yield and call anchored. Some of these are like the GSL and SB preferreds. But buying for any cap gain flip opps are extremely hard and limited now at best.

 

[Born2Fish]

More confusion........ I thought MNR-C was going to be called effective 8-31 due to the consolidation. But apparently not. Next date I see is 9-15, the upcoming call date but no announcement I can see so far.

Anyone know what is going on? I have quite a bit of this fortunately all below PAR.

MNR was expected to be bought out but it got rejected. So it will live on near term to see what other proposals bring.

Starwood Capital is said to be considering what it will do next after Monmouth Real Estate Investment (NYSE:MNR) failed to receive enough votes from holders for a sale to Equity Commonwealth (NYSE:EQC), according to a CTFN report.
Equity Commonwealth terminated its deal yesterday after failing to win the the votes necessary to takeover Monmouth (MNR).

I received the 8/31 Div pmt. Is the Div suspended going forward?

Edit to add: Gonna hold for now. Nothing else of interest in the Preferreds.

 

[Mulligan]

I received the 8/31 Div pmt. Is the Div suspended going forward?

Edit to add: Gonna hold for now. Nothing else of interest in the Preferreds.

MNR-C? No, no concern there. The only concern is how long it lives before its redeemed. Even prior to buyout offers MNR management was musing about redeeming it themselves to save on costs.

 

[Born2Fish]

MNR-C? No, no concern there. The only concern is how long it lives before its redeemed. Even prior to buyout offers MNR management was musing about redeeming it themselves to save on costs.

Thanks for the confirmation.

 

[BrianB]

Another one bites the dust. CBB-PB. Just found this on Quantum Online:

Cincinnati Bell also announced that, in connection with the completion of the Transaction, it will redeem all of its issued and outstanding 6 3/4% Cumulative Convertible Preferred Shares, without par value (the “6 3/4% Preferred Shares”), and the corresponding depositary shares, each representing a one-twentieth interest in a 6 3/4% Preferred Share (the “Depositary Shares”)

I know this has been a low-rated one, but the dividends came in every quarter and the 6.75% yield will be hard to match.

BrianB

 

[Sunset]

Another one bites the dust. CBB-PB. Just found this on Quantum Online:



I know this has been a low-rated one, but the dividends came in every quarter and the 6.75% yield will be hard to match.

BrianB

Darn, I think I have some of these

Thanks for the posting